Part one of Ayn Rand’s Atlas Shrugged ends in despair, as the oil fields of entrepreneur Ellis Wyatt burst into flames. Wyatt Oil, once a successful business that created jobs and launched an economic Renaissance in the western United States, had fallen victim to stifling taxes and government regulation. No longer willing to surrender to bureaucrats, Wyatt abandons his once-thriving business.
Page by page, Rand’s apocalyptic masterpiece is coming true right before our eyes. The most recent eerie similarity involves a bill introduced in Congress to create a “Reasonable Profits Board.” Yes; I am serious.
H.R. 3784 would wrest money from oil companies who, in the Board’s view, earn too much. The Board’s three members, appointed by the President alone, could impose taxes between 50 and 100 percent on “unreasonable profits.”
Rep. Dennis Kucinich (D-Ohio), one of the bill’s sponsors, assures us that the “bill would tax only the excess profits.” But what exactly is an excess profit? Apparently, whatever the unelected Board members say it is.
Kucinich says the money taken from the oil companies will be used to “create forward-thinking transportation alternatives.” In other words, three bureaucrats will have the power to extort money from the businesses consumers prefer in order to support politically favored cronies.
It’s important to note that the bill targets profits, not price. The Board is designed to protect consumers from oil companies who are “gouging their customers,” says Kucinich. But who will rescue consumers from the government’s price gouging? In several states, taxes make up almost 20 percent of gas prices. In Arizona, for every gallon of gasoline purchased, consumers pay 37.4 cents in taxes. But the government’s solution is yet more taxes.
In a free market, people earn money by providing a product or service that others are willing to buy at a price they are willing to pay. The “reasonable profits” bill would rob entrepreneurs of their motivation to be successful, depriving workers of job opportunities and consumers of needed products. If H.R. 3784 becomes law, Americans will yearn for the days when Atlas Shrugged was just a novel.
American Petroleum Institute: Motor fuel taxes chart